Lobbyists for the nation's thrift institutions have tacked on to a House bill an amendment that would remove savings and loan associations from the jurisdiction of the Federal Trade Commission.
The bill has been voted through committee and is ready for a House vote. A less sweeping version of the bill also has cleared committee in the Senate.
The amendment affecting S&Ls was attached to the so-called FTC Improvements Act. The S&L maneuver has put the FTC in a corner.
The act would provide the FTC with tougher regulatory authority over business. As the legislation now stands, however, the FTC would have to reliquish its hold on the S&Ls in order to get these tougher measures applicable to other businesses.
Thus the FTC could find itself in the ironic position of tacitly supporting the S&Ls' effort to break from its regulatory hold.
A further irony is that the S&L lobby, in supporting the legislation containing its amendment, finds itself pitted against most other major business lobbies, which oppose what they see as the bill's anti-business bias.
Among those in the business community who testified against the legislation are the American Advertising Federation, the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Bar Association.
According to Ray Gustini of the United States League of Savings Associations, one of the two major S&L lobbying groups, opposition to FTC regulation"has been part of the legislation program (of the S&L lobbies) for five or six years."
Then, last May, the S&Ls were spurred into action when the FTC filed suit against Washington's Perpetual Federal Savings and Loan Association. It was the first such suit by the commission since the FTC Act of 1914 created the agency.
In a case have national repurcussions, the FTC charged that the make-up of the city's largest S&L was illegal because six of its 11 directors also served on the boards of two competing banks.
The FTC said that the interlocking directorates can lead to anti-competitive agreements, express or tacit, between banking institutions.
In February, 1977, when the current legislation was introduced, it contained no mention of S&Ls. It had a section that would have eliminated certain exceptions to FTC regulation for banks and common carries, among others.
While lobbyists for the trucking and banking inustries eliminated this section of the bill involving them, lobbyists for the S&Ls got Rep. Matthew J. Rinaldo (R-N.J.) to introduce an amendment favoring their position.
The argument was that so long as banks were being considered in the bill, S&Ls could not be excluded.
The S&L lobby - the U.S. League along with the National Savings & Loan League - had actively stirred up its members in various states and congressional districts.
Haring Williams of the National S&L League says: "I think Rinaldo had a key S&L guy in his district."
A similar amendment was introduced on the Senate side by Wendell Hampton Ford (D-Ky.) "He was contacted by S&L people, too," Williams said.
What the S&Ls want is to have regulation of thrift institutions rest state authorities, to limited extent, and with the Federal Home Loan Bank Board (FHLBB) and the Federal Savings and Loan Insurance Corp. (FSLIC). The S&Ls argue that they are being discriminated against because they fall under FTC regulations while banks do not.
The FTC and some Hill critics of the S&L maneuver counter that the Bank Board is a pro-industry institution unwilling - and perhaps unable - to take tough actions against S&Ls, such as the Perpetual suit.
In a letter to Sen. Ford. FTC chairman Micheal Pertschuk argued:
"The FHLBB and the FSLIC have only limited and rarely exercised authority, and little expertise, with respect to the regulation of unfair or deceptive practices and unfair methods of competition."
The point made by those opposing the S&L sponsored amendment is that the FTC, by law has these regulatory powers while the FHLBB would need legal interpretation of its authority.
While the House version of the S&L amendment would take regulation away from the FTC, the Senate bill would exempt the S&L's from FTC regulation only to the extent that such regulation overlaps with that of the FHLBB.